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18.11.2016 - Inflation in the US last month increased by 0.4%

Currency trading and the euro. The price of euro showed decline amid rising probability of the Fed raising interest rates in December, which exceeded 90%. Yesterday the head of the Fed noted the advisability of monetary tightening in the near future, and news on the growth of the consumer price index in the US by 0.4% in October, became an additional incentive for the hawkish rhetoric of Mrs. Yellen. Strong support for the US dollar was also a significant increase in the number of housing starts in the United States to 1.23 million in October from 1.05 million in September. Today, the dynamics of trading will affect the news on the euro area balance of payments (09:00 GMT) and the speech of ECB’s President Mario Draghi (08:30 GMT). Our medium-term outlook for the euro remains negative, despite the approach to the target levels at 1,0450-1,0550.


Currency trading and the British pound. The price of the British pound continues to consolidate despite the strengthening of the US dollar. Investors fear sudden movements that may be associated with statements of politicians regarding the scenarios of Britain’s exit from the EU. Additional support for the pound became a strong data on retail sales, which rose by 1.9% vs. expected 0.5% according to our estimates, the upside potential in the near future is limited and we maintain a medium-term negative outlook due to the expectation of negative effects of country’s exit from the EU.

Currency trading and the Japanese yen. The price of the Japanese yen continues to steadily decline against the US dollar amid its strengthening, as well as due to the statements by the Bank of Japan on its readiness for further purchases of government bonds at a fixed yield to keep yields at low levels. The rise in probability of divergence growth in interest rates of the Federal Reserve and the Bank of Japan is a key factor that puts pressure on the yen. It is worth noting that after a strong reduction is likely to trigger the correction and this trigger may be a drop on the stock markets after the Fed raising interest rates. On Monday will be published reports on the trade balance of Japan and the index of business activity in the country. Our medium-term outlook remains negative.

Currency trading and the Australian dollar. The price of the Australian dollar continued to decline against the US dollar. Concerns about the prospects for trans-Pacific partnership after the victory of Donald Trump could neutralize the positive impact of rising prices for iron ore that is a key export commodity for Australia. On the next week in the country will not be published important data and movement will depend on the situation on the commodity markets and a change in the US dollar price. Our medium-term outlook for the Australian currency remains negative.

Currency trading and the New Zealand dollar. The price of the New Zealand currency continued its negative dynamics, due both to a decrease in the Australian dollar and rising US dollar and the recent lowering of the key interest rate of the Reserve Bank of New Zealand by 0.25% to 1.75%. Rising prices for dairy products were not able to change the mood of investors. Strong influence on the dynamics of prices at the end of next week could have a report on the trade balance of the country that recent times has been a disappointment for investors. Our medium-term outlook remains negative.

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RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.
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The CIF license of PFX Financial Professionals Ltd has been suspended by the Cyprus Securities and Exchange Commission until the 24th of December 2016. Please click here
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